1. Field of the Invention
This invention relates generally to electronic commerce, to conducting a business-to-business interactive offer and bid collection over a computer network, and more specifically to technologies for automatically placing bids in an online offer or auction.
2. Description of the Related Art
Prior to the advent of electronic auctioning over computer networks or electronic commerce, auctions were held in a group of gathered bidders with an auctioneer. As shown in FIG. 1, an auction (1) is conducted on behalf of a seller (2) by an auctioneer (4). The auctioneer receives a list of items to be sold and possibly a minimum and/or reserve price for those items. During the auction, a plurality of bidders (6) place bids (5) under the guidance and control of the auctioneer (4). In some cases, multiple bidders (9) may pool (8) their bids, and the pooled bids (7) are submitted as a single bid with a combined quantity to the auctioneer (4).
The auctioneer enforces the rules of the auction, such as minimum bid price and quantities, minimum bid incrementing from the previous bid for a new bid, and time limits for placing bids. Auction bidders are typically qualified as to their ability to complete the purchase should their bid be the winning bid prior to entering the auction room.
Many online auctioning systems such as “priceline.com” have become very popular for individuals and businesses to use to take advantage of auctions at which they cannot be physically present. Such e-commerce auctions or online auctions are usually conducted over a specified period of time of opening and closing for bids, and are typically conducted under one of several well-known sets of rules or models. These common models include “Dutch” auctions, progressive auctions, “Yankee” auctions, single-bid auction, sealed bid auctions, reserve auctions, and hybrids of these types of auctions.
However, most sales offering and bid systems conducted by manufacturers of goods or service providers are conducted under a different set of procedures and processes. Turning to FIG. 2, a typical trader and broker system for offering and accepting bids is shown (20). In such a business-to-business (“B2B”) offering and bidding process (20), a manufacturer or service provider (21) will notify one or more traders (24) of available products or services, quantities, and minimum acceptable bid values (22). The trader then provides offerings (23′) to one or more brokers (25), to which the brokers may respond with bids (23).
In some cases, bids may be accepted for either partial lots or whole lots of offered products. These offerings (23) and the corresponding bids (23) are collected by the trader, and the trader (24) makes a decision of which bids to accept. The traders (24) subsequently respond to the manufacturer or service provider (21) with actual orders or purchases (22).
Although the B2B offering and bid acceptance process may be conducted similarly to an auction, it is not an auction in the strict sense in that the order fulfillment, or bid acceptance, process is conducted usually by the trader at his discretion. For example, under a typical auction process, the highest qualified bidder may be defined as the bid winner. However, in a B2B offering and bid collection system, the trader may favor the second or third highest bid over the highest bid for the fact that the broker placing the second or third highest bid has preferred business arrangements, such as a longer history of purchasing from the trader or a history of larger volume purchases with the trader.
Brokers typically buy on speculation, and sell to end users. Brokers may sell to multiple retailers of products or services, or they may represent a single large retailer of a product or service.
Traders are typically commissioned sales professionals, and the structure of their commissions may vary depending on the quantities and the commodities or category of products being sold.
A particular broker may receive offers from multiple traders who represent a particular manufacturer or service provider. For example, a broker that represents a chain of computer stores may receive computer memory offers from a first trader, software upgrade offers from a second trader, and peripheral offers from yet a third trader, all of whom represent the same manufacturer. In response, this broker may bid or place “offers” for products or services in different categories, and must submit those bids to different traders based on the traders' commodities or categories of products that each trader handles.
The related patent application disclosed an on-line B2B offer system which is suitable for presenting information to bidders and brokers for products and services on which they are entitled to bid. The online offer system of the related applications allow brokers to act as “bidders”, and traders to act as “auctioneers” or “offerors”, to draw an analogy to online auctioning systems, while simultaneously meeting the specific needs of B2B commerce transactions.
“Proxies” are a bidding option for participants in auctions and offers. For example, in a “real” auction, a participant may send an agent to the auction to place bids on his or her behalf. The participant may instruct the agent to counter bid all bids up to a maximum, but if the proxy maximum is reached, not to counter bid above the maximum. During the actual auction, the agent may submit bids to beat the highest current bid until his proxy limit is reached, at which time the agent would not bid further.
The related applications disclosed an online, business-to-business offering system which also provided a proxy agent function that allowed a participant to specify a maximum proxy value for the system to automatically execute on behalf of the participant. In this case, the software agent polls the current status of the bid level in a particular offer or auction, and immediately places a bid higher than the highest competitive bid until the proxy maximum has been reached.
While this is efficacious in many respects, especially by allowing the participant to automatically “top” the current bid while not being personally involved in the bid placing, it has some potential shortcomings. The most notable of which is the possibility that two (or more) automatic proxy agents may bid against each other, submitting increasing bids as quickly as possible given the computing and communications resources allow. Thus, the bidding would rapidly escalate until all but one of the proxy agent's maximum limit has been reached.
This is analogous to a very wealthy participant sending a agent to an auction with a very high proxy limit, and when the bidding opens, the agent quickly escalates the bidding to his maximum limit. This experience may be seen negatively by the other participants of the auction, taking much of excitement and sense of adventure out of the process for the losers. This can lead to dissatisfaction and disillusionment in the process itself, and these unsatisfied participant's may choose not to be involved in future auctions.
A “real” or live proxy agent usually understands this problem, and will conduct himself in a less conspicuous manner. For example, he may wait to sense the “pace” of the bidding, only placing higher bids after some delay has occurred from the last placed bid. Or, he may wait until a time near the closing of the auction to place a higher bid, allowing other participants to bid against each other during the interim. However, to date, this problem has not been addressed by online auction and offering systems.
Therefore, there is a need in the art for a system and method which allows a participant in an online auction or offering process to create a proxy agent with instructions for the pace, timing, and limits of automatic proxy bidding.